Legal Issue In Contract Law Essay

2115 words - 8 pages

Facts of the situation
Speedway Airways Pty Ltd attempts to boost sales though promotion. It advertises the promotion in different forms of media. The promotion entails bonus air miles. Miles are collected through domestic bookings. The promotion states that, ‘Any customer who collects 50,000 miles can redeem them for an online code for a chance to win a great range of prizes, which include items on Speedway services’.1 The promotion also entitles customers who have reached 50,000 bonus miles to enter an online code for a chance to receive a winning confirmation email. The winner gets a grand prize of an all expense paid round the world holiday. This promotion runs only for a limited amount of time. Jim smith collapses from excitation after collecting the bonus air miles.
Willamina Brown receives a winning confirmation email after actively participating in search for 50,000 bonus miles. She goes to Speedway offices to claim her prize. She finds out that the promotion has been canceled from a notice. The notice reads ‘Due to an information technology error, faulty email confirmations were included in the Speedway promotion’. It further states that it is going to announce a new competition soon. Jim Smith overhears from a radio station the nullification of the promotion. This is the first of a number of occasions that the advertisement is appearing on different media. Speedways claim to have had an IT technical error. There was more than one winning confirmation email sent to customers and thus it declares that it ‘would not be honoring any prize claims’. However, there is a person who claims to have won the promotion and already awarded the prize.

Willamina Brown and Jim Smith have both received a winning confirmation email. A unilateral mistake has occurred where ‘only one contracting party is mistaken, the other is not mistaken but knows or ought reasonably to know, that the other side is acting under a mistaken view’. The two are in possession of winning tickets as they notice another person who claims to been awarded the grand prize.
There are four main ways in which the enforceability of a contract may be affected by a statutory provision which renders particular conduct unlawful: ‘(1) The contract may be to do something which the statute forbids; (2) The contract may be one which the statute expressly or impliedly prohibits; (3) The contract, although lawful on its face, may be made in order to effect a purpose which the statute renders unlawful; or (4) The contract, although lawful according to its own terms, may be performed in a manner which the statute prohibits.’
The key legislative provisions in the TPA, ss 51A and 51AB, which dealt with unconscionability are replaced by ss 20 and 21 of the Trade Practices Amendment (Australian Consumer Law) Act (No.2) 2010, Australian Consumer Law (ACL). Section 20 now provides: ‘A person must not, in trade or commerce, engage in conduct that is unconscionable, within the meaning...

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